Two special called meetings are set next week by the City Industrial Development Board (IDB) on the controversial $9 million Tax Increment Financing (TIF) for the Black Creek developers.
Officials said both meetings are still on.
A meeting was first set by the city attorney's office for next Monday at 11 a.m. "to conduct such business and legal decisions pertaining to the Tax Increment Financing (TIF) at Black Creek Mountain and any other business which may come before the Board."
Then a second meeting was set up for Friday, Aug. 15, at 11 a.m. "to conduct such business and consider legal decisions and advice of counsel pertaining to the Tax Increment Financing at Black Creek Mountain (the “TIF”), including, but not limited to, reviewing materials related to the TIF; deciding whether to appeal the Court case involving litigation in the matter of Helen Burns Sharp v. Industrial Development Board, et al; deciding whether to reconsider the TIF as a Project as referenced under T.C.A. § 7-53-101(13); deciding whether to ratify the actions of the board to approve this TIF as a Project in a previous meeting; and any other business which may come before the Board."
At the Friday meeting there will also be "a Public Hearing to allow community input involving said reconsideration of this TIF as a Project."
Ms. Sharp filed suit to block the TIF after it had been approved by the IDB as well as the City Council and County Commission for construction of a road and sewer to the top of Aetna Mountain in Lookout Valley. A group that includes Doug Stein and Gary Chazen has plans for a major development on top of the mountain .
Chancellor Frank Brown ruled in favor of Ms. Sharp and invalidated the TIF. He said there had been a violation of the Sunshine Law in its approval. He also ruled out an opinion by an attorney that it was a valid project under the state TIF law, saying the attorney was paid by the developers and had a conflict of interest.
The developers wound up buying the bonds themselves and have spent some of the money already, including paying out $242,000 in legal costs.
Current members of the IDB are James Miller, Chris Ramsey, James Woods, Skip Ireland, Ray Adkins and Breege Farrell. Former Chairman Ric Ebersole, who had raised issues about the TIF, recently resigned.
Mr. Stein issued this statement on Thursday afternoon, "Return on investment (ROI) is the concept of an investment of some resource yielding a benefit to the investor. A high ROI means the investment gains compare favorably to investment cost.
"For the Black Creek TIF District, the ROI to the public for the $9 million TIF is:
· The public gets a new road and utilities servicing an expanded neighborhood and commercial development.
· The public benefits from over $60 million invested in making the project a reality. This number does not include new home and retail construction of more than $500 million.
· The public gets over $16 million in new revenues for Hamilton County public schools.
· More than 454 jobs will be created in construction, sales, engineering, accounting, landscape maintenance, and service fields.
· Combined City and County annual property tax rates in year 20 when the Plan is fully developed will be nearly $8.4 million. In 2011 they were $32,000.
· No taxpayer in Chattanooga or Hamilton County that lives outside of the District will pay even a penny for the TIF.
"Some would have you believe that transparency is an issue but it is not. Every meeting has been noticed (May 1, 2012; June 6, 2012; June 19, 2012; October 15, 2012) and actions by the City, County and IDB occurred in public meetings after publication of appropriate resolutions and review of the Economic Impact Plan.
"The facts should be the basis for making sound decisions. These are the facts for the Black Creek Development:"
Mr. Stein listed these questions and answers about the project:
Q1. What is tax increment financing (TIF)?
A1. Tennessee law provides for different kinds of TIFs. In general, TIFs are economic development tools that reimburse up-front development costs for qualifying projects through increased tax revenues created by the development.
Q2. How do TIF laws apply to Black Creek?
A2. Black Creek qualifies for a TIF because it involves building a public road, public utilities, and various commercial spaces and structures, all of which are designed to promote economic development in Chattanooga. Tennessee has three separate TIF laws. Although other kinds of TIFs under Tennessee law require blight and the “but for” test, the Black Creek TIF, like other economic development TIFs, requires neither. Further, the Tennessee General Assembly has required the TIF law to be liberally interpreted in favor of economic development.
Q3. Why is a TIF right for Black Creek?
A3. A TIF is right for Black Creek because the proceeds of the tax increment financing will be used exclusively to pay for public improvements that will permit development of the project area and adjacent areas, including road, traffic, and utility improvements and related costs.
Q4. What is the area covered by the Black Creek TIF?
A4. The area for the Black Creek TIF district is located entirely within Hamilton County, Tennessee.
Q5. How is the Black Creek TIF paid for?
A5. The TIF will reimburse the developer for building the public road and other infrastructures. The bond funding for the TIF is secured and provided only by increased tax revenues generated specifically by the development. Taxpayers located outside of the TIF district will not fund the TIF. The Black Creek TIF does not involve an up-front governmental loan; rather, the developer gets paid only if its project creates new tax revenue.
Q6. Are taxes being collected and how are they being used?
A6. Taxes are now being levied on the Black Creek TIF district. The same base taxes paid before continue to go to the City and County. The additional, “incremental” taxes go first to pay for schools and other public purposes, and the remainder goes to repay the developer for its contributions.
Q7. May TIF funds be used to reimburse the developer for professional services fees incurred in relation to the project?
A7. Tennessee law expressly permits TIF funds to be used to reimburse the developer for payment of engineering, fiscal, architectural, and legal expenses incurred in connection with the project and bond issuance.
Q8. Were the meetings held by the City, County, or Industrial Development Board properly noticed and conducted?
A8. All meetings of the City, County, and Industrial Development Board relating to the Black Creek TIF were properly noticed and conducted.
Q9. What does the Black Creek developer plan to build and does that project meet the requirements for this TIF?
A9. The developer will build a public road, utilities, and various commercial infrastructures, all of which satisfy the requirements for this kind of TIF.
Q10. What is the impact of the Chancery Court’s ruling in the lawsuit?
A10. The Chancery Court’s ruling in the lawsuit affects only minor pieces of the TIF process that may easily be cured.
Here is the full first notice:
NOTICE IS HEREBY GIVEN, pursuant to T.C.A. §§ 8-44-101, et seq., as amended, that a special meeting of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF CHATTANOOGA is to be held on Monday, August 11, 2014, at 11:00 a.m. in the City Council Assembly Room, 1000 Lindsay Street, Chattanooga, Tennessee, to conduct such business and legal decisions pertaining to the Tax Increment Financing (TIF) at Black Creek Mountain and any other business which may come before the Board.
All interested persons are invited to attend and express their views or send written comments to Wade A. Hinton, Attorney for the Board, 100 East 11th Street, Suite 200, Chattanooga, Tennessee 37402 (telephone (423) 643-8250).
Here is the full second notice:
NOTICE IS HEREBY GIVEN, pursuant to T.C.A. §§ 8-44-101, et seq., as amended, that a special meeting of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF CHATTANOOGA is to be held on Friday, August 15, 2014, at 11:00 a.m. in the City Council Assembly Room, 1000 Lindsay Street, Chattanooga, Tennessee, to conduct such business and consider legal decisions and advice of counsel pertaining to the Tax Increment Financing at Black Creek Mountain (the “TIF”), including, but not limited to, reviewing materials related to the TIF; deciding whether to appeal the Court case involving litigation in the matter of Helen Burns Sharp v. Industrial Development Board, et al; deciding whether to reconsider the TIF as a Project as referenced under T.C.A. § 7-53-101(13); deciding whether to ratify the actions of the board to approve this TIF as a Project in a previous meeting; and any other business which may come before the Board.
There will also be a Public Hearing to allow community input involving said reconsideration of this TIF as a Project.
All interested persons are invited to attend and express their views or send written comments to Wade A. Hinton, Attorney for the Board, 100 East 11th Street, Suite 200, Chattanooga, Tennessee 37402 (telephone (423) 643-8250